20160426_-_J A_16-073_-_USAIDColombia_-_CELI_NS.pdf

USAID

FROM THE AMERICAN PEOPLE

April 26, 2016

ACTION MEMO FOR THE ADMINISTRATOR

FROM: A-AA/LAC - Elizabeth A. Hogan Isl

SUBJECT: Justification and Approval for Other than Full and Open Competition (J&A)

Recommendation That you approve a 12-month time extension of services with an expected cost of $11. 7 million, w~h·c includes a $4.9 million increase to the total estimated contribution for the Consolidaf d Enhanced Livelihood Initiative (CELI)/ North-South Region Contract (AID- 514-C-~ 001).

~ ~ Appro 1 prove _____ _

Background USAID/Colombia awarded the five-year, $89.5 million CELI/North South completion type contract to Chemonics International on October 12, 2011. The CELI/North South activity was designed to support the efforts of the Government of Colombia (GOC) to increase state presence and legitimacy in contested conflict territories with a holistic approach that includes economic growth, social development, governance, and small infrastructure under a whole-of govemment tactic. To date, USAID's contribution has resulted in significant gains by helping the GOC build democratic citizenship, licit market linkages, and improved government performance in a sustainable, replicable manner. The entire consolidation effort effectively lays the foundation for the implementation of the GOC-F ARC peace accords. As a result of dialogues with the GOC and the shift in their approach to "consolidation" efforts within the regions, USAID decided that it was no longer necessary to plan a follow-on activity with the same focus and objectives as the CELI North-South contract.

However, the political reality of Colombia changed significantly over the last few months. The GOC announced in September 2015 that by March 2016 the peace accord would be signed. While there have been political events that delayed the signature, most analysts believe an agreement will be signed soon as the talks have progressed to the point of no return. Taking into consideration the advanced peace negotiations between the GOC and the F ARC guerrillas, and a request made in December 2015 by the Ministry of Post Conflict to provide support during the first eighteen months after the accord is signed, the extension of CELI/North South becomes necessary in order to continue providing this comprehensive range of services in targeted geographic areas. Also, due to the budget cycle in Colombia, the GOC will not be able to access sufficient resources at a critical point in the peace process- the preparation and initial phase of implementation. The Mission estimates that just as Colombia approaches an agreement, the CELI/North South contract will begin the closeout process (all activities will have to be finished by July 2016 per the terms of the contract) leaving USAID without an important tool to respond to GOC emerging demands at a strategic moment.

Page 1of10

While USAID is working on new activities to begin after the CELI intervention concludes, these activities will have narrower objectives. For instance, the Producers to Market Alliance will work only on the economic growth component of a more all-inclusive intervention.

The extension of CELI North South is crucial for the U.S. Government (USG) to avoid a critical gap and support the GOC in securing peace in the geographic area covered by CELI I North South.

Under the proposed extension period, the implementer will continue to provide specialized technical assistance services and support the GOC's ability to respond to areas particularly affected by conflict. In doing so, USAID will make crucial contributions to the GOC's efforts in preparing for peace-the primary foreign policy priority for the USG in Colombia. While the specific activities implemented under CELI/North South are on track to attain contractual objectives by the current completion date, this cost extension will allow for the addition of high impact results while ensuring important continuity for the implementation of peace together with newly-elected local authorities seated in early 2016.

Given the recent Colombian peso devaluation with respect to the US dollar, and considering that most activities and sub-grants planned under the contract were agreed to in pesos, there is an opportunity for the Mission to strengthen the achievements made thus far with the savings achieved from this currency fluctuation along with additional resources that amount to 5.4 percent of the original size of the award.

Resource Implications This action seeks to expand, with the additional funding derived from unexpected currency fluctuation and fresh funds, a contract implemented by a provider who is uniquely qualified to deliver the required services due to the key existing relationships with the national and local governments and other private institutions in priority conflict-affected municipalities that have been cultivated over the last four years. If this action is approved the funds required will come from two sources: 1) savings derived from the currency fluctuation (estimated at $6.8 million) and 2) $4.9 million in additional funds from FY 2015. The additional resources will be used to complete more of the same activities and facilitate an additional $9 million in public private sector partnerships.

1) Savings: Due to the currency fluctuations of the Colombian peso vis-a-vis the U.S.

dollar, the program has an estimated $6.8 million in additional funds available for additional activities. Approximately $6,282,050 was derived from the established $58,000,000 Activity Fund. The remaining $530,901 was derived from operational savings. (Note: estimates are based on calculations at the time of the drafting of the request and are subject to change based on market fluctuations).

2) Total Estimated Cost Increase: Although the Mission is requesting an additional $11.7 million in additional activities during the 12-month period, the increase to the Total Estimated Cost (TEC) of the contract would be $4.9 million. This would bring the TEC ceiling to a total of $94.4 million or a 5.4 percent increase in the TEC ceiling.

Attachment:

Justification and Approval for Other than Full and Open Competition (J&A)

ATTACHMENT-JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (J&A)

USAID/Colombia

Consolidation & Enhanced Livelihoods Initiative (CELI) North South

Contract AID-514-C-12-00001

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with title 48, section 706.302-70(b)(5) of the Code of Federal Regulations (hereafter, "AIDAR 706.302-70(b)(5)"). This document was prepared by the office of Rural and Economic Development (RED) in USAID/Colombia.

2. The nature and/or description of the action being approved:

USAID/Colombia competitively awarded the five-year $89.5 million (equivalent in Colombian pesos) CELI I North South completion-type contract to Chemonics International on October 12, 2011, which is scheduled to conclude on October 11, 2016. This is a request to approve a time & cost extension to the contract to extend the completion date by 12 months, until October 11 , 2017, and increase the TEC by $4.9 million. If approved, this action includes $4.9 million of additional resources and $6.8 million derived from a significant devaluation of the Colombian peso vis-a-vis the U.S. dollar for a total of $11 .7 million worth of additional services.

3. Description of the supplies or services required, including an estimated value:

Specific services to be covered with the proposed extension will respond to GOC demands for preparation for peace including: 1) a potential expansion of quick response activities into additional villages (veredas) within the existing targeted municipalities or adjacent municipalities within the current departments in a coordinated effort with the Ministry of Post Conflict; 2) public and productive infrastructure activities (including pre-studies, designs and community participatory initiatives for small scale roads) following the plans of the GOC to deliver results in this strategic front; 3) Facilitate an additional $9 million in Public-Private Partnerships in order to consolidate sales in targeted value chains that will sustain licit income opportunities for farmers, conflict victims as well as ex-combatants; 4) an expansion of Good Governance activities to help facilitate the implementation of the peace accords at the municipal level; and 5) deepening interventions in those municipalities prioritized for post-conflict in the design and implementation of activities that respond to the GOC effort in peace implementation.

The cost estimate for the provision of the services described above is $11.7 million. Of this amount, the activity fund--covering the specific services mentioned above--is estimated to be about $7 million, which represents 60% of the additional budget under this J&A and will be used to implement the technical activities; the operating costs are calculated to be around 27% of total costs, while the indirect costs and fee represent 13%. As per the CELI model, all sub activities would be implemented by local organizations, a key element of USAID's efforts to strengthen local caP.acity in conflict-affected municipalities. The following is a cost break-out of how the $7 million of the Activity Fund would be distributed:

Economic Growth $4,014,300

Page 4of10

Productive Infrastructure Good Governance Social Development Cross Cutting

$2,006,753 $ 450,700 $ 298,000 $ 235,000

4. Statutory authority permitting other than full and open competition:

AIDAR 706.302-70(b)(5) "An award for the continued provision of highly specialized services when award to another resource would result in substantial additional costs to the Government or would result in unacceptable delays."

5. A demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited:

In accordance with AIDAR 706.302-70(b)(5), the CELI I North South contractor is uniquely qualified to offer highly specialized services as demonstrated by the following points:

a. The extension of the CELI I North South contract allows the U.S. Government to support GOC efforts in preparing for a post peace-accord environment - the overarching foreign policy objective of the United States in Colombia. Since the inception of the activity, the implementer has established and nurtured many relationships with local, state and national governmental entities and individuals.

Furthermore, CELI I North South developed collaborative and strong working relationships with communities and local organizations and partners for the implementation of community-level activities. CELI I North South 's strong working relationships go beyond those fostered at the national and departmental levels with ministerial entities and have focused at the municipal levels. Specifically, CELI I North South's organizational capacity building of municipalities has developed important networks of working partners in the offices of territorial planning, departmental development planning, municipal planning, agriculture, economic development and citizen security planning. Strong ties with local administrative offices have been key to the ongoing success of the CELI I North South methodology. This is especially important because these activities are directly related to leveraging and linking national policies and public goods and services to the rural regions in a concerted fashion. One of the most challenging obstacles faced by policy makers and GOC ministerial entities has been the weak, sometimes non-existent administrative capacity at the municipal · level to manage and implement resources as well as the cumbersome and highly centralized processes for decentralizing resources to conflict regions. If not addressed, this limitation will significantly undermine the GOC's ability to implement the peace accords by responding effectively to the demands of the communities at a very complex political moment. A new partner--brought at this stage to implement what would amount to a new, short-term program--would have to start from zero to establish and cultivate the same relationships, community linkages, and trust built over the past few years.

b. In addition to strong linkages with the public sector, CELI I North South has been instrumental in forging sustainable business deals between associations of small producers and buyers of value chains under Public Private Partnerships. CELI I North South has brokered sales for $18.9 million worth of cocoa, natural latex, specialty coffee and dairy products among others providing licit opportunities to communities that transitioned from coca to licit crops. CELI I North South developed strategic

1 This component includes: knowledge management and communications; and gender related activities alliances and strong business relations with domestic and international buyers to sell products domestically and abroad with a direct income increase for small farmers. The provision of sustainable licit income opportunities in conflict affected areas of Colombia is one of the top priorities for the GOC during the post-accord phase when FARC ex combatants will arrive to the territories looking for employment opportunities. The extension of CELI I North South allows the USG to continue facilitating the relation between producers associations, buyers and agricultural extension service providers while a new USAID program is awarded to continue the work with promising agricultural value chains. USAID/Colombia is already working on the Producers to Market Alliance activity which according to the plans should be awarded by the first quarter of FY 2017 allowing for a seamless transition on the economic growth front.

c. The technical approach upon which CELI I North South is based relies soundly on the principle of working with and through local partners. The current contractor has already developed well-established relationships with local implementers (e.g. through local NGOs and grants). To date, CELI I North South has awarded 479 grants to 256 local NGOs and community-based organizations to directly implement locally identified grass-roots development projects in conflict-affected municipalities. An extension of the current CELI contract would not otherwise diminish or restrict competition and reliance upon local partners.

d. Colombia held regional elections in October 2015. New governors and municipal mayors assumed their posts in January 2016. An extension would allow the USG to continue to provide support to new administrations during an extremely critical transition phase. This action would help guarantee the provision of technical assistance to mobilize funds at the municipal level at a time in which municipal administrations in conflict-affected areas become essential actors for the implementation of the peace accord.

e. As documented in the Contractor Performance Assessment Reports (CPARs), Chemonics International has been very successful in implementing the contract. It has met all the contractual requirements and exceeded many by implementing an evolving, comprehensive and articulated approach working together with public .and private institutions as well as with community-based organizations. The model has also facilitated significant partner resources through institutional and community contributions and investments as well as through PPPs; for each dollar the program has contributed, there have been 2.56 dollars from other stakeholders (including public and private sectors and community contributions).

f. An extension of the CELI I North South contract for a one year period would allow USAID/Colombia to continue promoting Public Private Partnerships leveraging an additional $9 million in public and private investments and record additional $15.5 million in sales of key supported value chains. It will be very difficult for a new project to facilitate funds and increase transaction sales in the targeted municipalities given the time required to build the necessary relationships.

In summary, the implementer is uniquely qualified to provide the requ ired services because the implementer has built the necessary relationships with local government entities, civil society, private sector and local implementers; it has proven adaptable and responsive to emerging challenges; it is well-placed to provide continuity and support to recently elected local governments; it has performed successfully; and it is well positioned to facilitate significant additional resources given its established relationships.

There would be substantial additional costs to the Government, both tangible and intangible, and significant delays would occur in quickly supporting the implementation of the peace accords in the municipalities where CELI I North South intervenes, should USAID be required to bid out a new one-year contract to provide the services described in Section 3. Specifically, the start-up time (opening offices, hiring staff, etc.) and the time for a new program to establish the required relationships with local actors will affect negatively the possibility of USAID to respond to the critical juncture of the country during the first phase of peace implementation. The startup costs for a new program are estimated at $226,000 and include recruiting, international travel for home office personnel, new equipment and office remodeling costs. Additionally, close out costs would be duplicated, as they would need to be incurred both by CELI I North South and the new contractor.

An extension for the continued provision of highly specialized services is warranted, as award to another resource would result in substantial additional costs to the Government or would result in unacceptable delays.

6. · Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by Federal Acquisition Regulation (FAR) 5.202 [AIDAR 705.002].

The synopsis required by FAR 5.201 will be published and this J&A document will be made public through the Federal Business Opportunities (FBO) Web site (www.fedbizopps.gov).

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable:

Based on the review of historical costs under CELI I North South, the activity implemented by the contractor and a review of initial proposed costs by the CELI I North South implementer, the Contracting Officer has made a determination that the anticipated cost to the government will be fair and reasonable and new deliverables will be accomplished in a cost-effective manner that is in the program and the USG's best interest.

8. Description of the market research conducted, and the results or a statement of the reasons market research was not conducted:

Although market research shows there are US organizations capable of doing this type of work, Chemonics International is the only organization currently positioned in these conflict-affected geographic areas that can quickly and efficiently implement this work based on the existing relationships it has built over the last four years. Chemonics International developed solid working relationships with a number of local actors including department and municipal governments, grass roots organizations and private sector representatives which facilitates an effective implementation of activities. In addition, it has the right means to guarantee that proper security conditions are in place to minimize risks, an important point since a spike in conflict is expected during the initial phase of peace implementation. During the competitive process held for this award there were multiple offers received and there is currently another US Contractor implementing a contract similar in scope to CELI I North South, but working in a different geographic area of Colombia. Other implementers are not able to provide the required services to respond immediately during the post-accord phase and at a reasonable cost (due to duplicative ramp-up and labor costs re-establishing relationships and networks). At the local level, market research shows the identified local partners do not have the capacity to effectively and efficiently implement these activities because of the size, complexity and scope of CELI I North South. Local entities would also face the timeframe and same cost inefficiencies.

When analyzing the decision to extend the CELI I North South contract, the Mission considered the above options both in terms of (a) maximizing the achievement of the USG's strategic objectives for Colombia and in relation to (b) overall results expected relative to cost under the existing program versus a new replacement mechanism. The decision to pursue an extension with the same contractor is based on cost efficiency and the existence of strategic relationships, partnerships and trust that have taken time to develop and cannot be easily or quickly replaced.

Reestablishing them would cause unacceptable delays in implementation and diminish the potential impact.

9. Other facts supporting the use of other than full and open competition:

As explained above, the current implementer of the CELI I North South contract is uniquely qualified to provide the required services. In addition, from a purely timing and cost standpoint, any effort to put in place a new contract to replicate what would be achieved under an extension of CELI I North South would take at least one year (estimated time to design and bid out a new activity and initiate implementation) and be too expensive given the success of the current implementer.

It is the Mission's programmatic priority to strengthen support of the CELI I North South effort during a critical transition to peace in a timely and efficient manner given the strategic position that this program represents in areas that are prioritized by the GOC for the post-accord initial phase.

10. Sources, if any, that expressed an interest, in writing, in the acquisition:

None.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

All subsequent requirements for these goods or services will be competed.

12. Technical or requirement personnel certification:

In accordance with FAR 6.303.2(c), I hereby certify that the technical statements included above and which form a basis for the justification are complement and accurate.

_ Attached __________ _ 04/15/2016 __ _

Jeffery Goebel, Technical Office Representative Date

13. Contracting Officer Certifications and Approval:

I hereby certify that the justification is accurate and complete to the best of my knowledge and belief.

_ Attached ___ _ _____ _ 04/15/2016 __ _

Curtrice Dorsey, Contracting Officer Date partnerships and trust that have taken time to develop and cannot be easily or quickly replaced.

Reestablishing them would cause unacceptable delays in implementation and diminish the potential Impact.

9. Other facts supporting the use of other than full and open competition:

As explained above, the current implementer of the CELI I North South contract is uniquely qualified to provide the required services. In addition, from a purely timing and cost standpoint, any effort to put in place a new contract to replicate what would be achieved under an extension of CELI I North South would take at least one year (estimated time to design and bid out a new activity and initiate Implementation) and be too expensive given the success of the current implementer.

It is the Mission's programmatic priority to strengthen support of the CELI I North South effort during a critical transition to peace in a timely and efficient manner given the strategic position that this program represents In areas that are prioritized by the GOC for the post-accord Initial phase.

10. Sources, If any, that expressed an Interest, In writing, In the acquisition:

None.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

All subsequent requirements for these goods or services will be competed.

12. Technical or requirement personnel certification:

In accordance with FAR 6.303.2(c), I hereby certify that the technical statements Included above and whicj~ ~:•:cation are complement and accurate. J.j / i S / i ~

Jeffery Goebel, Technical Office Representative Date

13. Contracting Officer Certifications and Approval:

I hereby approve this J&A and certify that the justification is accurate and complete to the best of my knowledge and belief.

fficer Date

Approved

As approving official, I approve this action based on the determination that AIDAR 706.302-70(b)(5) applies based on the circumstances described above.

7JdL ~Ji_, tJ-!'ir- l--0/b

Deborah Broderick, Agency Competition Advocate Date

Clearance page for J&A for CELI /North South:

j ice Representative

-~-'/'t/lb Date a.f!i-//~ Date q/, f~ clP Date

1- /~- 2o/Y, Date

L/• JC] I -;,o} J Date

Front Office Clearance Request

ACTION MEMO

Justification & Approval for Other than Full & Open Competition (J&A) Date Received by ES: 4/26/2016 Drafter: Keith Battles x24912

Bureau Level Clearances

LAC/ AA: BHogan Ml AA: A Crumbly M/OAA (ACA): DBroderick M/OAA: RPlucknett ES-SA:PMathews

FO Approval

A-D-ES: CColbow

ES: NShelat

DCoS: DCorle

CoS: MSumilas

Deputy Administrator: ALenhardt

Initials

BH

AC

DB

RP

cc out of office

Administrator: Gayle Smith For Signature

ACTS Folder No.: ES20160atn ES Staff Assistant: S.Callaghan 1'102

Clearance Status (Not Cleared, Info, Clear, Clear w/ comments) Clear Clear Clear Clear

Clear - - --e!AI' 'VJ tcniw"nt I cJ,~

4/ 14/2016 4/19/2016 4/19/2016 4/19/2016

_4/26/16_

GS_Approved_JA Colombia 05122016